#StockWatch: Buy ITC, Eveready Inds, BHEL, Balkrishna Inds

The Quint looks at stock recommendations from brokerage firms for you to buy/sell after the March quarter results.

Kotak Equities has a BUY rating on Balkrishna Industries (BKT) with a price target of Rs 850 per share reflecting a gain of almost 20% against its last close price of Rs 708 per share. The company is a global player in the Off-Highway Tyre (OHT) industry with a 6 per cent market share. While it derives a significant part of its revenues from Europe (53.8 per cent), the sharp depreciation of the Euro against the US$ is expected to escalate cost pressures. However, Kotak expects the company to take a cue from leading global OHT players who have announced price hikes in the range of 7-10 per cent for the European market, and follow suit.

BKT’s scrip has risen by 11.7 per cent in the last one year against the 8 per cent rise in the BSE Sensex.

Nomura Research has a BUY rating on Eveready Inds with a price target of Rs 410 per share reflecting a gain of 35 per cent over its last close price.

Eveready Industries is the market leader in the dry cell battery segment in India with a 50 per cent + market share. While the company’s battery segment will continue to be the largest contributor to revenue and profits for the next five years, its entry into the new LED business (2015) should provide additional growth over the long term and become a key driver of revenue and profit growth over the next five years.

The company is also involved in the packaged tea business under the brand “Tez” with extensive presence in North, Central and Eastern parts of India. The report says that this is one business which they can potentially lock to exit/divest stake at some point in the medium term, thereby unlocking value for investors. The scrip has risen by a sharp 361 per cent viz the 8 per cent gain in the Sensex in the last one year.

HDFC Securities recommends buying BHEL on dips of Rs 194 - Rs 208 for a target price of Rs 235 per share in the next one quarter.

BHEL is the largest engineering and manufacturing enterprise in India in the energy-related/infrastructure sector accounting for around 65 per cent of India’s installed power capacity. It caters to the core sectors of the Indian Economy, viz. Power, Transmission, Industry, Transportation, Renewable Energy, Oil & Gas and Defence and derives major revenues from power equipment manufacturing including boiler, turbine generators, major auxiliaries etc with more than 65 per cent  of the total component manufacturing in house. A pick-up in order inflow activity is the key to business revival for BHEL in terms of revenue recovery and limiting margin contraction.

Its scrip has fallen by 4 per cent in the last one year, underperforiming the broader market, the Sensex which is up 8 per cent.

Ambit has a BUY rating on ITC with a price target of Rs 384 per share which implies a gain of 26 per cent from its last close price of Rs 304. It is India’s largest cigarette company, with a 75%/80% volume and value share and has several popular brands such as Gold Flake, Classic, Wills, Flake and Navy Cut. The report says that it expects a revival in ITC’s cigarette volume as bidi smokers switch to cigarettes and rural youth increasingly take up cigarette smoking instead of bidi’s followed by a moderation in excise duty hike to 8-9 %.

ITC’s scrip has fallen by 8% compared to the 8 percent rise in the Sensex.